Cumberland (WQOW) - We've heard for several weeks now about how the drought is impacting farmers. But for those who rely on those crops to produce other products, their growing concerned that their prices may skyrocket.
"This plant can manufacture 3 million gallons of biodiesel a year," says Ron Ruppel, CEO of SunPower Biodiesel. "We're an agriculturally-based economy, especially in the Midwest, and we all rely on our corn and our soybeans and our canola's and these products to do well."
Especially for companies like SunPower Biodiesel. It uses soybeans and canola, to make biodiesel blends. In agriculture, soybeans are broken down into two components, feed for animals, and oils.
"Which goes into like salad oils, and mayonnaise, and those types of products, and it also can be made into plastic, and then also, for us, a portion of it goes into the renewable energy market," says Ruppel.
But this year, their product could be in jeopardy.
"About 30 percent of our production comes from soybean oil, and so we're very concerned about drought throughout the central part of the United States," says Ruppel.
That drought has decimated crops, like soybeans, across the Midwest, including portions of southern Wisconsin.
"Fortunately for our sources' supply, there are quite a few beans in this general area, but we're more concerned about pricing, because the pricing is based on worldwide commodities, not just based on our local market," Ruppel says.
Which has SunPower watching the market, and waiting.
"What the industry is telling us is that the average yield per acre is going to drop quite dramatically across the United States," says Ruppel.
Either way, SunPower says if soybean crops are down, their prices will go up.
"We would have to convert more of our production to the canola side of things, which, by its very nature is a little bit higher in price, so our products pricing would go up," Ruppel says.
The soybean crop will be harvested in September and October, so the full effect of the drought won't be known until then. SunPower Biodiesel has done well over the past couple of years, the company says they'll be adding two more sites down in southern Wisconsin by next year.
